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1.040/1.401/ESD.018 Project Management, Spring 2007 Lecture 15 Project Control

1.040/1.401/ESD.018 Project Management, Spring 2007 Lecture 15 Project Control. Samuel Labi and Fred Moavenzadeh Department of Civil and Environmental Engineering Massachusetts Institute of Technology. Project Control. Recall: The 5 Phases of Project Management. DESIGN, PLANNING. CLOSEOUT.

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1.040/1.401/ESD.018 Project Management, Spring 2007 Lecture 15 Project Control

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  1. 1.040/1.401/ESD.018Project Management, Spring 2007Lecture 15Project Control Samuel Labi and Fred Moavenzadeh Department of Civil and Environmental Engineering Massachusetts Institute of Technology

  2. Project Control Recall: The 5 Phases of Project Management DESIGN, PLANNING CLOSEOUT FEASIBILITY OPERATIONS DEVELOPMENT CLOSEOUT Finance Evaluation Organization Estimation Planning Monitoring & Control Changes & Claims Quality & Reviews Actual Start of Project

  3. Project Control Monitoring & Control: A Feedback Process • Detect deviations Control 1. Actions 2. Revised Plans, Cash Flows, Schedules, etc. Monitoring 1. Measurement 2. Performance Analysis) • Correct Deviations

  4. Project Control Project Control: The Big Picture … Given Project is Off-track

  5. Project Control Project Control: The Big Picture … Given Project is Off-track Monitoring indicates that: - Project is behind time-schedule, and/or - Project has exceeded budget, and/or - Quality of materials or finished work is below standard, and/or - Productivity is lower than as planned, etc.

  6. Project Control Project Control: The Big Picture … Resources for PC (the 4-M’s) Given Project is Off-track

  7. Project Control Project Control: The Big Picture … Resources for PC (the 4-M’s) Given Project is Off-track Resources available to the Project Manager for Project Control: - Money - Manpower (labor) - Materials - Machinery (Equipment)

  8. Project Control Project Control: The Big Picture … Resources for PC (the 4-M’s) Given Mechanism and Elements of PC Project is Off-track Adjust the resources Adjust the project characteristics: size, scope, etc

  9. Project Control Project Control: The Big Picture … Resources for PC (the 4-M’s) Given Mechanism and Elements of PC Project is Off-track Adjust the resources Adjust the project characteristics: size, scope, etc More labor? Better labor? Better supervision? More materials? Better materials? More equipment? Better equipment? More money? resources Reduce project size? Reduce project scope? Terminate project? project

  10. Project Control Project Control: The Big Picture … Resources for PC (the 4-M’s) Given Mechanism and Elements of PC Project is Off-track Adjust the resources Adjust the project characteristics: size, scope, etc output Project brought back on-track Was the Project Control successful? How can we tell?

  11. Project Control Project Control: The Big Picture … Resources for PC (the 4-M’s) Given Elements and Mechanism of PC Project is Off-track Adjust the resources Adjust the project characteristics: size, scope, etc output Project brought back on-track

  12. Project Control Outline of this Lecture: • How can we tell when PC is needed? • What resources are available for PC? • What are the elements of PC? • What is the mechanism of PC? • Some important issues in Project Control

  13. Part 1 How can we tell when Project Control is needed?

  14. Is Project Control is needed now? How can we tell? General Clues Specific Clues Performance and Quality Time “Primitive” Indicators Other Indicators Cost

  15. How can we tell when Project Control is needed? • Performance - Unexpected technical problems arise - Insufficient resources are unavailable when needed - Quality or reliability problems occur - Owner/Client requires changes in technical specifications - Inter-functional complications and conflicts arise - Market changes that increase/decrease the project’s value GENERAL CLUES (Meredith and Mantel, 2006)

  16. How can we tell when Project Control is needed? GENERAL CLUES (Meredith and Mantel, 2006) • Cost - Technical difficulties that require more resources - Scope of work increases - Bid amount (accepted for the contract award) is too low - Reporting of the monitoring results are poor/late - Project budgeting for contractor cash flows not done right - Changes in market prices of the inputs

  17. How can we tell when Project Control is needed? GENERAL CLUES (Meredith and Mantel, 2006) • Time - Technical difficulties require more time to solve - Scope of work increases - Unexpected utilities needing relocation - Task sequencing not done right - Required material, labor/equipment unavailable when needed - Key preceding tasks were not completed on time.

  18. 1. How can we tell when PC is needed? SPECIFIC CLUES • “Primitive” indicators: • More resources or less resources haven been used than planned • Activities are taking long than planned • Cost of activity (or of project to date) is higher than expected

  19. 1. How can we tell when PC is needed? SPECIFIC CLUES • “Primitive” indicators: • More resources or less resources haven been used than planned • Activities are taking long than planned • Cost of activity (or of project to date) is higher than expected

  20. 1. How can we tell when PC is needed? SPECIFIC CLUES • “Primitive” indicators: • More resources or less resources haven been used than planned • Activities are taking long than planned • Cost of activity (or of project to date) is higher than expected planned actual NOW Legend planned actual

  21. 1. How can we tell when PC is needed? SPECIFIC CLUES • “Primitive” indicators: • More resources or less resources haven been used than planned • Activities are taking long than planned • Cost of activity (or of project to date) is higher than expected $ 70% 50% now time

  22. 1. How can we tell when PC is needed? SPECIFIC CLUES Why are they “primitive”? • May be biased. • Do not consider that progress may be overestimated or underestimated due to: • execution of unscheduled work done, or • execution of more work of low value and less work of high value

  23. 1. How can we tell when PC is needed? SPECIFIC CLUES

  24. 1. How can we tell when PC is needed? SPECIFIC CLUES now

  25. 1. How can we tell when PC is needed? • So we know Project Control is needed (at time t) particularly when: - RVt is –ve, - RIt < 1 - CVt is –ve - CIt<1 - SVt is –ve - SIt is < 1 - TVt is –ve - TIt is < 1

  26. Part 2 Resources for Project Control

  27. 2. Resources for Project Control • Money • Machinery (Equipment) • Materials and Supplies • Manpower (Labor and Supervision)

  28. Money as a PC Resource • Not a direct resource • Rather, used to influence the amounts or quality of the other resources

  29. Using Equipment for PC • Often used to augment labor in order to speed up project • Can be expensive • May involve renting or purchasing

  30. Materials and Supplies as a PC Resource • Increase in quality or quantity may be necessary to enhance project control • Improved inventory systems for materials

  31. Manpower as a PC Resource • Project problems (time delays, excess costs, poor performance, etc.) are partly due to the human element (action or inaction) • In using Manpower as a tool for project control, PM encounters human emotions (anger, fear, frustration, etc.)

  32. Part 3 Elements of Project Control

  33. Elements of Project Control Resources-related Project-related

  34. 3. Elements of Project Control 3A. Resource-related • Manpower-related control • Machinery-related control • Money-related control • Material-related control Re-allocate resources

  35. Elements of Project Control 3A. Resource-related Re-allocate resources • Manpower Machinery Money Materials • Also referred to as ”Human Resource Control” • - Lay-off/fire any under-performing staff • - Hire staff with needed skills • Assign staff with specific skills to specific activities • Issues: • PM may be seen as a “stern disciplinarian” • PM must avoid heavy handed actions, • Fix problems without blaming people

  36. Elements of Project Control 3A. Resource-related Re-allocate resources Manpower • Machinery Money Materials • Also referred to as ”Physical Asset Control” • - Decommission any under-performing equipment • - Bring in equipment with appropriate capabilities • - Re-assign specific equipment to specific activities

  37. Elements of Project Control 3A. Resource-related Re-allocate resources Manpower • Machinery Money Materials • Also referred to as ”Physical Asset Control” • - Decommission any under-performing equipment • - Bring in equipment with appropriate capabilities • - Re-assign specific equipment to specific activities • Issues: • Equipment decisions may involve some economic • analysis • Equipment-based control easier than manpower- • based control • Some trade-off may exist between manpower and • equipment utilization.

  38. Elements of Project Control 3A. Resource-related Re-allocate resources Manpower Machinery • Money Materials • Also referred to as ”Financial Resource Control” • - How much money should be spent? • - How should it be spent? • PM assisted by: • Project accountant • Project Finance Manager

  39. Elements of Project Control 3A. Resource-related Re-allocate resources Manpower Machinery Money • Materials • Discontinue use of sub-standard material • Seek new sources of superior material

  40. Elements of Project Control 3B. Project-related • Options: - Reduce project size? - Reduce project scope? - Terminate project?

  41. Part 4 Mechanisms of Project Control

  42. Mechanisms of Project Control Types of Mechanisms: - Cybernetic - Go/No-go - Post-control

  43. Types of Control Mechanisms Cybernetic - “Cyber” means “Steer” or helmsman (Greek language) - May be First-, Second-, or Third-order

  44. Cybernetic control mechanisms Monitoring mechanism (e.g. sensor) Inputs • Mechanism: • System output monitored by sensor • Sensor measurements transmitted to Comparator • Measurements compared with predetermined standards • - Deviation from standard sent to decision-maker • If deviation from standard is too large, signal sent to Effector Process Outputs Effector and Decision-maker Comparator Standards

  45. Cybernetic control mechanisms Monitoring mechanism (e.g. sensor) Inputs • Mechanism: • System output monitored by sensor • Sensor measurements transmitted to Comparator • Measurements compared with predetermined standards • - Deviation from standard sent to decision-maker • If deviation from standard is too large, signal sent to Effector Process Outputs Effector and Decision-maker Comparator Standards This is a First-order cybernetic control system. (Standards are fixed) Example: Thermostat that keeps room temperature to 70F all year round.

  46. Cybernetic control mechanisms Monitoring mechanism (e.g. sensor) Inputs • Mechanism: • Same as described for First-order Cybernetic systems, but: • Standards are not fixed, but the manner they change is fixed. Process Outputs Effector and Decision-maker Comparator Standards Memory Pre-programmed Responses This is a Second-order cybernetic control system (standards vary according to a fixed set of rules) Examples: Thermostat that keeps room temperature to 70F in winter and 65F in summer, Robot installations, Automated inventory systems, Automated record keeping systems

  47. Cybernetic control mechanisms Monitoring mechanism (e.g. sensor) Inputs • Mechanism: • Same as described for First-order Cybernetic systems, but: • Standards are not fixed but are variable. Also, the manner they change is variable because there is a consciousness (human element) involved. Process Outputs Effector and Decision-maker Comparator Standards Consciousness Memory, Selection This is a Third-order cybernetic control system (standards vary according to a variable set of rules) Examples: Most Project management systems.

  48. Cybernetic control in Project Management • PM must clearly define “outputs” in terms of relevant project characteristics • PM must establish standards for each characteristic • Monitoring mechanisms (sensors) must be established to measure the characteristics at regular intervals • For each characteristic, the trigger point or maximum deviation (difference between “attained level” and “standard level”) should be established. • If triggered, appropriate action should be taken to minimize the deviation between Attained Level and Standard Level of performance.

  49. “Go/No-go” Mechanisms of Project Control • Testing to see if some specific precondition has been achieved • Yes/No (discrete) • Control in most PM fall into this category (Cooper, 1994; Meredith and Mantel, 2006) • Example: Was Activity X completed within 6 months? • Did Activity Y cost exceed its budget of $1.5 million? • Some engineering judgment is necessary in exercising these types of controls.

  50. Post-Control Types of Project Control • Also called: Post-performance control, Post-performance review • Is done after the activity or project is over • Like a post-mortem or report card • Is it “Locking the barn door after the horse has escaped”? • Or is it “We need to learn from the past to avoid future mistakes”? • Generates lessons from current projects so that future projects can be controlled better.

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